Facebook stock soooo close to regaining its $38 IPO price

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(FILES)This February 25, 2013 photo taken in Washington, DC, shows the splash page for the Internet social media giant Facebook. Shares of Facebook surged July 25, 2013 after a sharp jump in mobile ad revenues propelled profits and marked what some analysts called a turning point for the social networking giant. A day after its quarterly earnings report, Facebook shares leapt 29 percent to $34.22 at 1915 GMT, the biggest jump since its public offering in May 2012 as the stock hit its highest level in over a year. AFP PHOTO / Karen BLEIER KAREN BLEIER/AFP/Getty Images

MENLO PARK — It took more than 14 months, but Facebook stock on Tuesday climbed to within four cents of the price at which it was first offered for public trading last year, before its precipitous plunge last summer.

Facebook shares closed on Tuesday at $37.63 after climbing as high as $37.96. That was the closest it’s been to the stock’s $38 initial public offering price since its market debut on May 18, 2012, which was followed by a steep drop last summer that wiped out billions of dollars in shareholder equity.

The company’s much-hyped stock debut set a record by valuing Facebook at a whopping $104 billion, more than any other U.S. company’s IPO value in history. But the hype soon fizzled as investors sold on warnings that Facebook had missed a crucial shift by consumers toward using mobile devices, where the company lacked the ability to show advertising.

CEO Mark Zuckerberg later vowed to remake Facebook as a “mobile first” company, by redesigning the service for iPhone and Android smartphones and creating new ad formats for mobile screens. By last week, Zuckerberg was able to report that mobile advertising contributed 41 percent of the company’s $1.6 billion in ad sales for the last quarter.

Earlier this month, investors heard from Google (GOOG) — Facebook’s much bigger rival in the online ad business — that its mobile ad business was still struggling. Facebook shares, which were already on an upward swing, shot up more than 40 percent since last Wednesday’s second-quarter earnings report.

“This was an inflection point quarter,” said Mark Mahaney of RBC Capital Markets.

Wall Street bears still caution that the social network remains vulnerable to changing consumer habits, especially among fickle teens, while bulls say it hasn’t yet tapped all of its potential revenue sources.

Facebook announced Tuesday that it will partner with mobile game developers to promote their apps in exchange for a share of their income. Bloomberg News, meanwhile, reported Tuesday that Facebook is close to making a widely anticipated move to sell video ads later this year.

Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/BrandonBailey.

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